The Treasury says it will wait for a lead manager to guide it through the proposed early redemption of the Sh281.8 billion ($2 billion) Eurobond, which matures next June.
This is despite President William Ruto telling global investors that Kenya planned to buy back at least 50 percent of the outstanding Eurobond before the end of the year.
“So far, what we have done is to advertise for lead managers from specific banks to help us in terms of the road map to effective liability management. We will rely on the advice from the lead manager and it is, therefore, too early to talk about the timing of the buyback,” Treasury Cabinet Secretary Njuguna Ndung’u said.
The Treasury says it is in the second phase of selecting the lead managers who will oversee the next Eurobond issue and is preparing the request for proposal (RFP) documents.
Four banks have been shortlisted as potential lead managers for Kenya’s next Eurobond, including Citigroup, JP Morgan, Standard Bank and Standard Chartered Bank.
Kenya has been looking to dodge the full Sh281.8 billion bullet payment in June by paying part of the principal earlier by buying out some of the holders of the Eurobond.
The Treasury says such a move should have the backing of the lead managers.
“It’s not in doubt what we are going to do but we will let the expert do the job. If you are going to have an expert to help you, you wouldn’t want to pull the rag under their feet,” said the CS.
The early redemption of the Eurobond will see the government buying out holders through the paper’s secondary market from which it would pay the prevailing price of the bond (dirty price).
The Treasury is widely expected to deploy proceeds from recent external borrowing to pay for the buyback including its just closed Sh70.5 billion ($500 million) three- and five-year syndicated loan facility.
